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The tax status of health savings accounts can help employees manage potentially higher health coverage costs as the Affordable Care Act is implemented, write Robert Bloink and William Byrnes. Employers may opt for health plans that carry lower premiums and higher deductibles in order to avoid the "Cadillac tax" that will be assessed on plans exceeding $10,200 for individuals or $27,500 for families, Bloink and Byrnes write. HSAs allow employees to make pre-tax contributions to offset higher deductibles, and they provide tax-free earnings and withdrawals, they write.

Related Summaries

Lawmakers have expressed support for eliminating a tax under the Affordable Care Act that applies to insurance coverage that exceeds $10,200 for individuals or $27,5000 for families. The House and Senate also both approved the Protecting Affordable Coverage for Employers bill to maintain the definition of a small group market.

Employees may see changes to their health insurance coverage as employers look to avoid a 40% tax on high-cost health plans that is set to begin in 2018. To cut costs, companies may take a number of steps, ranging from promoting healthy living to increasing deductibles.

Companies are seeking ways to deal with the so-called Cadillac tax on high-cost employee health care plans under the Affordable Care Act. The Congressional Budget Office says businesses may move to lower-cost plans to avoid the tax, which begins in 2018. This could lead to a rise in high-deductible health plans.